Landlords selling properties targeted over taxes

UK landlord insurance customers are one of two groups set to be targeted by the taxman as part of a crackdown looking to cut out people avoiding corporate gains tax (CGT) on their property sales.

HM Revenue & Customs (HMRC) is turning its attention to both buy-to-let owners and people who have sold their second homes and neglected to pay what they owe.

CGT is applicable for those who are looking to offload a house or flat which is not their primary residence and is purchased for more than a set cut-off figure, which currently stands at £10,600.

Those looking to avoid having to pay a heavy penalty for failing to declare what they owe previously have been given an amnesty, with the closing date set at August 9th 2013. After this, they will have until September 6th to pay the outstanding amount to HMRC, and anyone failing to comply will face substantial fines.

The governmental organisation is also looking to use data provided by local authorities as a way to crack down on landlords who are skipping payments on income tax by neglecting to declare the rental income they earn from their properties.

Marian Wilson, head of campaigns for HMRC, said: "It is better to come to us before we come to you.

"After the opportunity closes, HMRC will use information it holds about property sales, in the UK and abroad, to identity people who have not paid what they owe. Penalties, or even criminal prosecution, could follow."

Stephen Goldstraw, a partner at Manches LLP, said that a great many people find the issue of what they owe on second homes difficult to comprehend, with CGT, income tax and potentially inheritance tax all coming into play, which leaves some simply not declaring ownership.

The issue of tax may be something that landlords across the UK want to look into, especially with the health of the rental market at the current time facilitating the buying and selling of rental homes more frequently as owners look to expand and diversify their portfolios.